The OECD has updated its CRS implementation and assistance web page:
TINs & TAX RESIDENCY INFORMATION
In addition, jurisdictions have made information available with respect to their Tax Identification Numbers (TINs) and tax residency rules, in order to help both taxpayers and financial institutions to comply with their obligations under the CRS.
OECD has stated categorically it will close residence-by-investment schemes such as buying St. Kitts passports or obtaining Dubai residence certificates by incorporating free trade zone companies
The top CRS loophole being closed by the OECD is residency-by-investment programs. The investor fraudulently self-certifies their tax residency based on procured residence certificates or passports, supported with a bought or leased property. Invariably the investor doesn't truely reside in the tax haven long enough, if at all, to be considered a genuine tax resident.
17 October 2017 - The OECD has almost completed its closure of this loophole on its CRS implementation and assistance web page. The reporting FI must confirm the claimed tax residency of their client is according to the number of days stayed in the jurisdiction. Therefore the identiy / utility bill is no longer proof of residence. This brings to an end all these residence by investment programs.
There are now just a handful of tax haven participating jurisdictions who have not yet submitted to the OECD their tax residence rules, namely the very tax havens selling residencies, e.g. St. Kitts, Aruba, Curacao, BVI, Cook Islands, Antigua, Barbados, Bahamas, Panama, etc. Once this list is completed, an update to CRS tax residency will be issued via an update to the OECD FAQ.
OECD says it will close the CRS loophole of residence-by investment schemes
||December 2016 Financial Times - Pascal Saint-Amans, the top tax official at the OECD, says the residence-by-investment schemes offered by governments such as Malta, Cyprus and in the Caribbean will not undermine the transparency drive. We are working on this. It will not survive long.|
Example of common Caribbean residence by investment scheme
St. Kitts and Nevis
Pascal Saint-Amans on St. Kitts / Nevis citizenship by investment scheme
See around 23m00
"...for a few thousand hundred thousand dollars anyone can get residency in Nevis to avoid paying tax."
Example of common Asian residence by investment scheme
For an individual to be regarded as a tax resident, he has to satisfy at least one of the following tests:
|4.||6 June 2017 - OECD mentions tackling residence-by-investment schemes.||
The OECD is also in close contact with a number of jurisdictions in order to assess whether other schemes that have been disclosed through the facility (including a number of residence by investment programmes) may pose an actual risk for avoiding CRS reporting and therefore need to be addressed.
|5.||25 Sep 2017 - The OECD is focused on maintaining the integrity of the CRS.||
The OECD is taking extra precautions to ensure that reportable financial information regarding financial institution Account Holders that are subject to reporting is reported. The OECD has stated that there are potential and perceived loopholes in the CRS that require significant changes and amendments in certain Jurisdictions for the automatic exchange of information to be effective. The OECD Secretary-General (Angel Gurria) has stated that the loopholes and deficiencies within the CRS encourage the use of secrecy to evade taxes. The OECD considers the following loopholes as the most serious to close: